The used car industry still faces challenges such as the lack of industry standards and the lag of policies and regulations.
Editor’s note: This article is from the WeChat public account “Three Words Finance” (ID: Sycaijing), the author of the harvest.
The development of the used car market is not an emerging market, it has been going through many years of development.
With the continuous integration and transformation of the Internet in recent years, the used car industry is gradually developing into a digital service ecosystem. It can be said that used car e-commerce has carried out a comprehensive digital transformation of the traditional used car market.
On the one hand the Internet greatly facilitate consumer demand for cars, but had to hide in the traditional second-hand car market issues are becoming increasingly apparent. Lift the used-car platform, in addition to the ubiquitous advertising, all kinds of negative news is also emerging.
For such an innovative industry, if the existing bias is thrown away, it can be found that the problem of the used car platform reflects not only the platform itself. Many of the problems left over from the traditional period are undoubtedly revealed under the transparency of the Internet, which provides a sample for improving the industry system and setting new industry standards.
The used car industry is growing rapidly in the context of the “stock age” of passenger cars
According to iResearch’s “China Used Car E-commerce Industry Research Report”, in the past 8 years, China’s used car market transaction volume has achieved more than 22% compound annual growth rate. Correspondingly, since 2016, the growth rate of passenger car production and sales has declined rapidly, and the growth rate of private car ownership in China has also been adjusted.
This means that the passenger car market has begun to transition from “incremental market” to “stock market”, and the used car market has achieved sufficient growth conditions.
Comparing the mature used car market in the United States, the Chinese market is still unsatisfactory. The ratio of new car sales to used car trading volume in the US market has remained above 1:2.3 for a long time, but China is still less than 1:0.5.Moreover, the ratio of used car dealerships to car ownership in the United States has stabilized at more than 14%, compared with 5.8% in China.
It can be said that China’s used car industry still has a large room for growth.
The investment and financing boom in China’s used car industry began in 2012, and capital’s attention to the used car industry continues to increase. From 2012 to 2018, there were more than 150 investment and financing events involving used cars, with a total investment of more than 10 billion yuan.
It is worth noting that the investment and financing events in the used car industry in 2018 declined rapidly, but the investment amount continued to increase. This reflects that the emerging second-hand car industry has spent relatively early early financing rounds, the industry’s head effect is further evident, the industry is about to undergo a round of adjustment of the survival of the fittest. Some used car e-commerce companies have completed large-scale financing for listing.
The second-hand car e-commerce is essentially a digital transformation of the used car industry, from the early source information aggregation and cross-counting, to other refinement business.
It can be said that under the blessing of the Internet, the Chinese used car market is constantly being explored, but under the rapid development, it has not completely solved the legacy problems of the traditional used car market.